Employing a combination of systems analysis, comparative analysis and practical evaluation, the study identifies the limitations of the traditional multi-tier territorial administrative structure when applied to urban areas characterized by high levels of integration, connectivity and functional interdependence. Based on these findings, the article proposes a comprehensive set of policy recommendations, including improving the legal framework, clearly defining the distribution of powers and responsibilities, restructuring the urban administrative apparatus, promoting digital governance and strengthening mechanisms for accountability and power oversight. These measures are intended to enhance the effectiveness and efficiency of state governance while fostering sustainable urban development.
Keywords: State governance; Two-tier local government; Major urban areas; Urban government; Administrative reform.
INTRODUCTION
Over the past decades, rapid urbanisation in Vietnam has transformed major cities into key drivers of economic growth, centres of innovation and hubs for international integration. However, the rapid expansion of megacities such as Hanoi and Ho Chi Minh City, as well as other strategically important urban centres including Hai Phong, Da Nang and Can Tho has also posed unprecedented challenges to the state governance system.
The former three-tier local government model has revealed significant structural constraints on urban development. Urban areas function as integrated systems of technical infrastructure, social infrastructure and economic flows and therefore cannot be effectively governed through administrative fragmentation based on district- county or ward-level boundaries.
Politburo Resolution No. 06-NQ/TW on the planning, construction, management and sustainable development of Vietnam’s urban areas emphasises the need to “innovate the organisational model and operational mechanisms of urban government towards a leaner, more effective and more efficient system”. Against this backdrop, the transition to and further refinement of the two-tier local government model has become an inevitable trend. Within this reform process, innovating state governance in major urban areas extends far beyond merely streamlining the administrative apparatus; it requires a fundamental transformation in governance thinking, operational mechanisms and the modes of interaction among the state, the market and society.
THEORETICAL FRAMEWORK: GOVERNING MAJOR URBAN AREAS UNDER THE TWO-TIER LOCAL GOVERNMENT MODEL
In the process of modernising public administration, major urban areas are no longer viewed merely as territorial administrative units but rather as complex socio-economic systems in which the state, the market and society interact closely. The development experience of megacities and growth-pole cities worldwide demonstrates that the effectiveness of urban governance no longer depends primarily on hierarchical administrative control but increasingly on the capacity to coordinate economic, social and technological dynamics within the urban space.
From the perspective of contemporary governance, a major urban area is an open system that continuously interacts with its external environment while concentrating large-scale migration flows, domestic and foreign investment, highly interconnected production and business activities and vast amounts of data generated from economic, administrative and social transactions. These characteristics make major urban areas highly dynamic and directly influenced by changes in markets, technological advances and global development trends. Consequently, they expose the limitations of the traditional linear administrative management model, characterised by multiple intermediate layers, lengthy administrative procedures and limited responsiveness to emerging practical demands. When the pace of socio-economic development exceeds the adaptive capacity of the administrative apparatus, administrative overload, delays in public service delivery and rising governance costs become increasingly difficult to avoid.
The two-tier local government model is expected to provide a more favourable institutional framework for modern urban governance. Its central objective is to reduce intermediary administrative layers, shorten the distance between decision-making authorities and citizens and businesses and thereby enhance administrative efficiency and policy responsiveness. However, streamlining the organisational structure alone is only a necessary condition. For major urban areas, a more critical requirement is the establishment of robust decentralisation mechanisms at the grassroots level, ensuring that local authorities directly serving citizens are endowed with sufficient authority and resources to address public affairs promptly and effectively. At the same time, urban governance under the two-tier model requires a transition from administrative practices primarily based on paper documentation to data-driven governance, enabling policy decisions to be made on the basis of real-time information and thereby improving the accuracy, transparency and effectiveness of state governance.
These requirements can be further explained through several contemporary theories of urban governance that have been widely adopted internationally. First, polycentric governance theory advocates the distribution of authority and management responsibilities across multiple decision-making centres rather than concentrating power within a single level of government. This approach enhances institutional flexibility, strengthens the autonomy of grassroots authorities and improves the capacity to address practical governance challenges. Second, the concept of smart governance highlights the strategic role of digital technologies, big data and interconnected digital platforms in urban management. By integrating data from multiple sectors, governments are able to monitor, anticipate and respond to governance issues more rapidly and accurately. In addition, performance-based governance places primary emphasis on the outcomes of public administration, using citizens’ satisfaction, the quality of public services and the efficiency of resource utilisation as key indicators for evaluating governance performance.
Although these theoretical approaches are founded upon different conceptual perspectives, they converge on a common objective: Building a governance system that is more effective, more adaptive and more resilient in responding to the complexities of contemporary development. These principles also constitute the fundamental criteria for assessing the success of the two-tier local government model in governing Vietnam’s major urban areas.
HO CHI MINH CITY: A LARGE-SCALE DIGITAL GOVERNANCE HUB
In implementing the two-tier local government model, Ho Chi Minh City has emerged as the locality that most clearly demonstrates the transition from traditional administrative management to digitally enabled urban governance. As Vietnam's largest city in terms of population and with one of the highest volumes of administrative transactions generated daily, the city has faced an urgent need to modernise its governance approach in order to ensure timely administrative processing and high-quality public services.
One of the most significant achievements has been the steady increase in the proportion of administrative procedures processed online through the city’s integrated end-to-end public service platform. Ho Chi Minh City has implemented the “one-stop - one - decision - one - accountable authority” model, enabling citizens and businesses to complete multiple administrative procedures entirely through digital platforms, from submitting applications and tracking processing status to receiving final results. Notably, the adoption of a non-territorial administrative processing mechanism allows citizens to complete administrative procedures at any designated service centre within the city, regardless of their place of residence, thereby substantially reducing both processing time and transaction costs.
Alongside administrative reform, the city has accelerated the digitalisation of population, land, civil registration and other key administrative databases. Shared digital platforms, integrated databases and digital connectivity infrastructure have been maintained in stable operation, ensuring seamless interoperability among government agencies, administrative units and grassroots authorities. Their effective integration with national databases has facilitated rapid information sharing, data verification and utilisation while reducing manual processing and eliminating unnecessary duplication of data.
From the perspective of public governance, these achievements indicate that Ho Chi Minh City is gradually developing a large-scale digital government model in which data serve as the foundation for public administration and service delivery. Digital transformation has not only reduced pressure on the traditional administrative apparatus but has also enhanced transparency, information traceability and evidence-based decision-making. This experience reinforces Ho Chi Minh City’s position as a leading urban centre driving administrative digital transformation and innovation in urban governance within the implementation of the two-tier local government model.
DA NANG: AN EXPANDED URBAN GOVERNANCE MODEL FOLLOWING ADMINISTRATIVE RESTRUCTURING
The implementation of the two-tier local government model in Da Nang has coincided with the expansion of the city’s development space and the restructuring of administrative units to strengthen regional connectivity. This process has not only altered the scale of urban administration but has also created the need for a governance model capable of managing a larger, more interconnected and increasingly complex urban system. In this context, Da Nang has gradually shifted from a fragmented administrative management approach towards an integrated urban governance model that ensures coherent policy implementation while strengthening the autonomy of grassroots authorities.
One of the defining features of this transformation has been the enhanced decentralisation of authority to commune - and ward - level governments. Following the operation of the new administrative structure, grassroots authorities have been entrusted with broader responsibilities in state administration, administrative procedure processing and public service delivery. Practical implementation indicates that local governments have proactively organised routine administrative operations, implemented socio-economic development programmes, accelerated administrative reform and promoted digital transformation initiatives. Positive results have been recorded in indicators such as the online processing of administrative applications, cashless payment adoption and the timely resolution of administrative procedures, demonstrating the relatively rapid adaptability of grassroots administrative institutions to the new governance requirements.
At the same time, the restructuring of administrative units has facilitated the emergence of a polycentric urban structure. Rather than concentrating administrative functions and public services exclusively within the urban core, commune and ward-level authorities have been granted greater authority and resources to resolve public affairs directly within their jurisdictions. This approach has enhanced the coordination of urban development, reduced pressure on the central urban area and enabled more effective utilisation of local resources. It also provides an important institutional foundation for establishing mechanisms of intra-urban regional governance that are consistent with the development trends of contemporary metropolitan areas.
From the perspective of urban governance, Da Nang's experience demonstrates that administrative reform extends well beyond organisational restructuring and is closely associated with the reconfiguration of urban development space. The expansion of the city's administrative scope, strengthened decentralisation and enhanced inter-jurisdictional coordination are gradually shaping a more flexible governance model that is better suited to the demands of modern urban development. In this respect, Da Nang represents a notable example of integrating spatial urban restructuring with administrative reform, with the ultimate objective of strengthening development coordination capacity and improving the quality of public services under the two-tier local government model.
HAI PHONG: A GROWTH POLE DRIVEN BY GOVERNANCE PERFORMANCE
Among Vietnam's key growth centres, Hai Phong represents a compelling example of the close relationship between institutional reform, improved governance performance and sustained economic growth. As the largest industrial, seaport and logistics hub in northern Vietnam, the city serves not only as a strategic gateway for regional and international trade but also as a powerful growth pole generating significant spillover effects across the Northern Coastal Region.
One of the city's most notable reforms has been the acceleration of decentralisation and the streamlining of the administrative apparatus to shorten administrative processing time and enhance institutional efficiency. The administrative structure has been reorganised to reduce intermediary layers while strengthening the accountability of agencies directly responsible for policy implementation. These reforms have significantly improved the efficiency of administrative procedures, particularly in areas related to investment, construction, land administration and business activities. At the same time, grassroots Public Administration Service Centres were put into operation in a coordinated manner from the outset, ensuring the continuity of public service delivery and preventing disruptions for citizens and businesses during the transition to the new administrative model.
The effectiveness of this governance model is clearly reflected in the city's socio-economic performance. Hai Phong has maintained one of the highest economic growth rates in Vietnam for many consecutive years, establishing itself as one of the country’s most consistently high-performing localities. Alongside the expansion of its economic scale and increasing state budget revenues, the city has continued to rank among the national leaders in key indicators of public governance quality, including administrative reform, citizen satisfaction with public administrative services and the Provincial Competitiveness Index (PCI).
From the perspective of public governance, Hai Phong's experience illustrates a transition from the traditional model of administrative management to a development-oriented government. Under this approach, local government performs not only its regulatory and administrative functions but also assumes a proactive role in creating an enabling environment for investment, business development and economic growth. By shortening administrative procedures, improving the quality of public services, and reducing administrative transaction costs, the city has enhanced the attractiveness of its investment environment while strengthening both its own competitiveness and that of the wider regional economy.
When administrative reform is closely aligned with the objectives of improving governance performance and promoting economic development, the two-tier local government model can generate positive impacts that extend well beyond organisational restructuring. Hai Phong provides a compelling example of a development-oriented government, in which governance effectiveness itself becomes a strategic resource for stimulating economic growth, enhancing regional competitiveness and fostering sustainable local development.
THE NEED FOR FLEXIBLE GOVERNANCE IN MAJOR URBAN AREAS
Major urban areas have become the places where both the opportunities and the challenges of Vietnam’s ongoing administrative reform are most clearly manifested. Despite differences in their development trajectories, these cities share the common characteristics of large-scale socio-economic centres, featuring dense populations, high concentrations of economic activities and an enormous volume of administrative transactions. At the same time, they experience rapid changes in key urban issues, including population dynamics, labour markets, infrastructure, environmental management, land administration and public service provision. Consequently, the administrative apparatus is required not only to ensure legality and administrative order but also to enhance its capacity to respond to policy challenges in a timely, accurate and adaptive manner amid continuously evolving socio-economic conditions.
The mechanical application of traditional administrative management models is likely to expose significant limitations. As administrative workloads continue to expand and governance tasks become increasingly complex, grassroots authorities face a growing risk of institutional overload if decentralisation is not accompanied by corresponding resources and appropriate governance instruments. Furthermore, vertically structured administrative procedures involving multiple intermediary levels may reduce the responsiveness of government to emerging urban challenges, ranging from the processing of administrative procedures to the management of socio-economic development. Another major challenge concerns the interoperability and integration of data across government agencies. If data remain fragmented across sectors, administrative levels or local jurisdictions, the overall effectiveness of governance will be constrained, while coordination costs and administrative transaction costs will inevitably increase.
These characteristics indicate that the central challenge facing major urban areas extends beyond merely streamlining the administrative apparatus; it requires the establishment of a more flexible governance model. First, the governance approach should gradually shift from one primarily based on administrative boundaries to one oriented towards functional governance and development needs. Many contemporary urban issues including transportation, environmental management, urban planning, digital transformation, and economic development are no longer confined within the boundaries of individual administrative units but instead require integrated coordination mechanisms operating across broader urban areas. Accordingly, organisational flexibility and adaptive institutional arrangements will become decisive factors in determining governance effectiveness.
At the same time, deeper decentralisation to grassroots authorities should be regarded as an essential requirement, provided that it is supported by integrated digital data systems and modern accountability mechanisms. Experience from major urban areas demonstrates that when grassroots governments are granted sufficient authority while being supported by interoperable databases and shared digital platforms, many administrative matters can be resolved promptly at the point where they arise, significantly reducing processing time and administrative costs. Such an approach also enhances the autonomy, accountability and innovative capacity of local urban authorities in addressing practical governance challenges.
More broadly, these developments reflect an ongoing transition from traditional administrative management to a model of modern urban governance. This process may be described as the urbanisation of governance, whereby governmental institutions and operating mechanisms are increasingly designed to reflect the specific characteristics and functional dynamics of urban spaces rather than relying on a uniform administrative model. Accompanying this transformation is the emergence of digital urban government and real-time data-driven governance, in which data become a strategic resource for forecasting trends, supporting evidence-based decision-making and evaluating policy effectiveness. In the context of accelerating urbanisation and digital transformation, this is likely to become the dominant direction for the continued evolution of the two-tier local government model in Vietnam’s major urban areas.
MAJOR URBAN AREAS AS LABORATORIES FOR NATIONAL GOVERNANCE REFORM
The implementation of the two-tier local government model in Vietnam’s major urban areas demonstrates that this reform is not merely an adjustment to the administrative apparatus but also an opportunity to experiment with new approaches to governance under the conditions of contemporary urban development. As centres of economic growth, gateways for international integration and engines of regional development, Ho Chi Minh City, Da Nang, and Hai Phong have emerged as the country's most important institutional laboratories for testing the effectiveness of new governance models in response to increasingly complex development demands.
Ho Chi Minh City has positioned itself as the leading force in administrative digital transformation, gradually establishing a large-scale digital government model built upon integrated data systems and online public services. Da Nang has demonstrated significant progress in restructuring urban space through administrative reorganisation while strengthening decentralisation to grassroots authorities, thereby enhancing its capacity to coordinate development across an expanded urban area. Hai Phong, in contrast has illustrated the effectiveness of aligning administrative reform with economic development objectives by building a governance model oriented towards facilitating growth, enhancing competitiveness and improving the investment environment.
These experiences confirm that governing major urban areas under the two-tier local government model extends far beyond administrative reform in its conventional sense. Fundamentally, it represents a process of redefining and strengthening the state's governing capacity within the context of the modern urban environment, where effectiveness, flexibility and adaptability have become the essential criteria of public governance. The success of these major urban centres will therefore not only stimulate local development but also provide valuable guidance for the broader modernisation of Vietnam’s national public administration in the years ahead.
CONCLUSION
Innovating state governance in major urban areas in parallel with the refinement of the two-tier local government model represents a fundamental transformation in both the organisation of the administrative apparatus and the philosophy of public governance in Vietnam. Practical experience demonstrates that the former multi-tier administrative model is no longer compatible with the development dynamics of contemporary metropolitan areas.
The transition to the two-tier local government model with strategic governance concentrated at the provincial or municipal level, the elimination of intermediary administrative layers, and flexible implementation at the commune and ward levels - constitutes an appropriate institutional direction. This model has the potential to unlock previously constrained development resources, enhance administrative effectiveness, and improve the quality of life for urban residents. The long-term success of this reform requires strong political commitment, coherent institutional and legal design, sustained investment in digital governance infrastructure, and, above all, a governance philosophy that places citizens and businesses at the centre of sustainable development.
MA. Pham Linh Chi
REFERENCES
- Politburo (2022). Resolution No. 06-NQ/TW on the Planning, Construction, Management and Sustainable Development of Vietnam's Urban Areas through 2030, with a Vision to 2045.
- National Assembly of the Socialist Republic of Vietnam (2015). Law on the Organisation of Local Government (and the 2019 Law Amending and Supplementing a Number of Articles of the Law on the Organisation of the Government and the Law on the Organisation of Local Government).
- National Academy of Public Administration (2023). Modern State Governance. Hanoi: Hanoi University of Science and Technology Publishing House.
- Building a two-tier urban government model in Vietnam's special urban areas: Opportunities and challenges. State Organization Review, No. 4, 2024.
